Options traders have been cautioned from the beginning that uncovered options are always high-risk. But this belief should be challenged. It's not the nature of a strategy, but when it is opened or closed that determines risk.

How do you calculate returns from writing covered calls? At first glance, this seems like an easy question; return is return, right? But in fact, calculating return can be done in several different ways.

Even the most experienced option trader can benefit with an occasional reminder: The most basic strategies often are the best, all depending on the situation and what you hope to accomplish with the option position.

Options are odd devices in many ways; but one potential risk many traders are completely unaware of is the tax risk involved. Taxation for options is complicated and illogical in many respects. Know where you stand before closing out positions to avoid having an unpleasant tax surprise.

The two major synthetics -- long stock and short stock -- involve options but mirror price movement in 100 shares of stock. These may reduce market risks while setting up positions with zero cost - the best leverage of all.